Buying Down Rate vs Larger Down Payment Calculator 2027

Compare buying down mortgage rate (points) vs making larger down payment 2027 — see which saves more over 5/10/30-year hold period.

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Discount Points Math

1 point = 1% of loan amount. Reduces rate ~0.25% typically. Break-even = points cost / monthly savings. Worth it if hold past break-even (~4-6 years usually).

Bigger Down Math

Less interest over life. But you LOSE liquidity (cash is tied up in equity). Better if you can't earn 6.5% elsewhere AND you'd otherwise spend the cash.

Refi Risk

Buying down rate = waste if you refi within 5 years (lose unused points). Bigger down stays with you. Tilts toward bigger down if you might refi.

Best Choice Framework

Long hold + plan to keep loan = buy down rate. Short hold or might refi = bigger down. Need liquidity = neither, invest extra instead.

Source: freddiemac.com Points and Fees primer, cfpb.gov discount points. Last updated: May 2026.